Cross-Border Inheritance: Why One Country's Law Isn't the Whole Story
When an American expat passes away in Japan, one question comes first:
Which country's inheritance law applies?
For an American citizen, Japan generally begins by looking to the applicable U.S. state law. However, under the conflict-of-laws rules adopted by many U.S. states, assets located in Japan may ultimately be governed by Japanese law through renvoi (反致).
Understanding how these rules work together—and why inheritance law is separate from inheritance tax—can save your family considerable time, expense, and confusion.
Related article
For an introduction to Japan's inheritance system, read How to Navigate Inheritance, Wills, and Tax in Japan (2026 Edition)
Disclaimer: This article is intended for general informational purposes only and should not be considered legal or tax advice. The applicable law and procedures vary depending on the facts of each case. Always consult qualified legal and tax professionals familiar with cross-border inheritance before making decisions or taking action.
Quick Summary
Starting Rule: Under Article 36 of Japan's Act on General Rules for Application of Laws, Japan generally looks first to the deceased's national law to determine the applicable inheritance law.
Practical Result: Japanese assets may ultimately return to Japanese law through renvoi (反致), while U.S. assets generally remain subject to U.S. state law and procedures.
Law vs. Tax: Inheritance law determines who inherits. Inheritance tax law determines which assets are taxed, by whom, and how much tax is due.
Table of Contents
1. The First Rule: The Deceased's Nationality Matters
2. How Renvoi (反致) Works in Practice
3. Inheritance Law and Inheritance Tax Are Different
4. Practical Planning for Cross-Border Families
5. Q&A
6. Wrap Up
1. The First Rule: The Deceased's Nationality Matters
As a general rule, Japan first looks to the national law of the deceased when determining the applicable inheritance law.
This principle is established under Article 36 of Japan's Act on General Rules for Application of Laws (法の適用に関する通則法第36条).
In other words, the starting point is not:
where the deceased lived;
what visa they held;
whether they were a Permanent Resident; or
the nationality of the surviving spouse.
For U.S. citizens, however, the analysis becomes more complex because inheritance law is determined at the state level rather than the federal level. Depending on the type and location of the assets involved, more than one U.S. state's law may become relevant before the applicable inheritance law is determined.
Once the applicable law has been identified, it determines matters such as:
who the legal heirs are;
how the estate is divided; and
whether a will is legally valid.
2. How Renvoi Works in Practice
Consider a hypothetical example: a U.S. citizen living in Tokyo passes away holding four distinct assets across both countries:
a home in Tokyo;
a Japanese bank account;
a house in Illinois; and
a brokerage account in Texas.
The legal analysis generally follows three steps:
Step 1: Japan Looks to U.S. State Law
Under Article 36 of Japan's Act on General Rules for Application of Laws, Japan looks first to the national law of the deceased. For a U.S. citizen, this requires identifying the relevant U.S. state law before determining the governing civil inheritance law.
Step 2: U.S. Conflict-of-Law Rules Classify Each Asset
Once the relevant U.S. state law has been identified, its conflict-of-law rules determine how each asset is treated.
Tokyo House (Japanese Real Estate): Real property is generally governed by the law of its physical location. Because the property is located in Tokyo, U.S. state law refers governance back to Japan.
Japanese Bank Account (Japanese Movable Asset): Movable property is generally governed by the deceased's legal domicile at death. Because the deceased resided in Japan, U.S. state law refers the Japanese account back to Japan.
House in Illinois (U.S. Real Estate): Because the property is physically located in Illinois, Illinois real property law governs that asset.
Brokerage Account in Texas (U.S. Monetary Asset): Financial accounts located in the United States remain subject to U.S. legal procedures. Depending on asset titling and beneficiary designations, the account may pass directly to a named beneficiary or they may require probate under the applicable state law.
Step 3: Japanese Assets Return Through Renvoi
At this point, the applicable inheritance law has been determined. The next question is how each asset is actually transferred.
For Japanese Assets: Although the legal analysis begins with the applicable U.S. state law, Japanese assets are ultimately administered under the Japanese Civil Code through renvoi (反致). In practice, this determination is made as part of the Japanese inheritance procedures, allowing Japanese assets to be transferred through the Japanese legal system.
For U.S. Assets: U.S. state law and court supervision govern.
How Families Transfer the Assets
Japanese Assets: To transfer Japanese assets, an attorney or judicial scrivener (司法書士) prepares a formal Legal Opinion / Foreign Law Report (外国法調査報告書) proving to the Legal Affairs Bureau (法務局) and banks that Japanese law applies through renvoi.
If the deceased left a valid Japanese Will (or coordinated cross-border will), assets are transferred directly according to the terms of the will—bypassing the need for an Estate Division Agreement.
U.S. Assets: Assets located in the United States must follow U.S. state execution procedures. If out-of-state real property is involved, an Ancillary Probate proceeding may be required in that state unless a Revocable Living Trust or Transfer-on-Death (TOD) deed was established.
Where valid beneficiary designations (TOD/POD) or Joint Tenancy with Right of Survivorship (JTWROS) are in place, funds pass directly to the surviving owner or beneficiary without court intervention.
Key Takeaway
Different assets within a single estate are often governed—and administered—under different legal systems.
Through renvoi, Japanese assets generally return to Japanese civil law and are transferred using Japanese administrative procedures. U.S. assets remain subject to U.S. state law and U.S. execution rules.
This multi-jurisdictional split is why international families prepare coordinated estate plans in both countries, rather than relying on a single will.
3. Inheritance Law and Inheritance Tax Are Different
Another common misconception is that the country whose inheritance law governs the estate is also the only country with the right to tax it.
That is not the case.
Inheritance law and inheritance tax are two separate legal systems, each operating under its own rules.
Inheritance law determines questions such as:
Who inherits the assets?
What share does each heir receive?
Is the will legally valid?
Inheritance tax law determines:
Which country has the right to tax the inheritance?
Which assets are taxable?
How much tax is owed?
As a result, an asset may be inherited under U.S. state law while still being subject to Japanese inheritance tax, depending on the circumstances of the deceased and the heirs.
4. Practical Planning for Cross-Border Families
Understanding which country's law applies is only the first step. Planning ahead can save your family significant time, expense, and uncertainty during an already difficult period.
Prepare Separate Wills
For many cross-border families, preparing separate but carefully coordinated wills for each relevant jurisdiction is highly recommended.
As discussed earlier, different assets may ultimately be governed by different laws and require different legal procedures. A single will covering assets in multiple countries may not always be the most practical solution.
When multiple wills are used, they should be carefully coordinated to ensure they complement one another and do not unintentionally revoke or conflict with another will.
Review How and Where Your Assets Are Held
How and where your assets are held can significantly affect both the inheritance process.
Assets located in different countries may require separate legal procedures and supporting documentation before they can be transferred.
In some cases, consolidating assets or reducing the number of jurisdictions in which they are held can simplify estate administration for your family.
Likewise, the ownership structure of an asset—whether it is held individually, jointly, or through another legal arrangement—may affect the procedures required, the documentation needed, and the overall tax outcome.
Key Takeaway
The goal of cross-border estate planning is not simply to comply with the law. It is to make life easier for the family you leave behind. By planning ahead, you can reduce unnecessary cost, uncertainty, and administrative burden across both countries.
5.Q&A
Q1. Does Permanent Residence determine which country's inheritance law applies?
A1. No. Your immigration status—whether you hold a Work Visa, Spouse Visa, or Permanent Residence—does not determine the applicable inheritance law.
Under Article 36 of Japan's Act on General Rules for Application of Laws, Japan generally begins by looking to the national law of the deceased. For U.S. citizens, however, the analysis may ultimately return to Japanese law through renvoi (反致), depending on the applicable U.S. state law.
Q2. My spouse and I are both foreign nationals living in Japan. We've built our life here and own most of our assets in Japan. Can we sign one joint will?
A2. No. Under Japanese law (Civil Code Article 975), joint wills executed by two or more people are prohibited. Each spouse must prepare his or her own will.
Q3. If U.S. inheritance law governs my estate, does that mean my family won't have to pay Japanese inheritance tax?
A3. No. Inheritance law (who inherits and how the estate is divided) and inheritance tax (whether inheritance tax applies) are separate legal issues.
Even if your estate is administered under U.S. law, Japanese inheritance tax may still apply depending on the residency and nationality of the deceased and the heirs, as well as other relevant circumstances.
Never assume that the application of foreign inheritance law automatically exempts your estate from Japanese inheritance tax or reporting obligations.
6. Wrap Up
Cross-border inheritance is complicated enough on its own.
Many of us know we should prepare early. Yet life gets busy, and it's easy to think, "I'll deal with it later." Unfortunately, "later" often arrives when our family is already coping with the loss of a loved one.
You don't have to solve every legal or tax issue today. Simply creating an inventory of your assets is an excellent first step.
If you have questions or would like to share your own experience with cross-border inheritance, feel free to leave a comment below!! I’d love to hear it.
Aki | Japanese | Former Head of HR in Global Finance
I believe building a long-term life in Japan requires seeing the bigger picture.
By understanding how visa, healthcare, taxes, retirement, senior care, inheritance, and family decisions fit together, you can make informed decisions and take calculated risks.
